William Densham, partner and real-estate litigation expert at Eversheds, has commented on the Court of Appeal’s recent decision in the case of PGF II SA v OMFS, which confirmed that a party’s failure to respond to an offer of alternative dispute resolution (ADR) is unreasonable conduct that will allow the court to deviate from the usual cost consequences of a Part 36 offer.
Densham said that ADR is a key element of the Jackson reforms, encompassed in the recently published Jackson ADR handbook, and that ADR should play an important role in reducing the use of the court’s resources and costs.
He added: ‘This case confirms that the court will not tolerate parties unreasonably failing to consider ADR. It is wise to revisit any previous offers of ADR to ensure responses are given and any refusals are justified.
‘Undoubtedly, there are likely to be cost consequences for not fully responding to an offer to mediate, even if it may be entirely reasonable to do so.’